Coffee companies watch the public market

Coffee companies have seen Dutch Bros. ‘ success in the public market, and they are taking note. Seven weeks after the drive-thru coffee chain went public via an Initial Public Offering (IPO), a smash hit for most accounts, Black Rifle Coffee Company (BRCC), a coffee company focused on military veterans, has announced Tuesday, November 2. that it plans to go public through a specialist acquisition company (SPAC) as part of a roughly $ 1.7 billion deal expected to close in the first quarter of 2022.

In addition to the company’s own-brand physical coffees and its placement in retail stores, BRCC also operates a Direct-to-Consumer (D2C) e-commerce business, selling its coffee for a one-time purchase as well as by monthly subscription. This D2C online store also includes clothing and equipment on the theme of the DCFC and the army. The company states that this online store has grown at a CAGR of 218% since its inception.

Overall, the company emphasizes its omnichannel efforts, touting sales opportunities online and in physical spaces as well as its rapidly growing wholesale business.

Certainly, Dutch Bros. ‘ instant popularity with investors could encourage other emerging coffee brands to try their luck in the public market. The drive-thru chain’s stock prices rose nearly 60% on the first trading day and a further 30% on the second. The price continued its upward trend in the weeks following the IPO.

In some ways, the BRCC model resembles that of Nestlé-owned Blue Bottle Coffee. While the former targets a militaristic clientele with a gun-themed branding and the latter targets a more coastal clientele, aiming to project an aura of culinary authority, both emphasize an omnichannel approach that includes a subscription service, a D2C e-commerce storefront, and a business. owned cafes. Aditi Jain, Senior Director of Global Ecommerce for Blue Bottle, spoke to PYMNTS about the importance of emphasizing accessibility.

“It’s about how to create that unified experience in our cafes, mobile and online to really meet customers where they are – whether they’re at home, or just in a coffee shop to pick up their mobile order,” or they wish to engage in a cafe and sit down and have a cup of coffee, ”Jain explained. “So I think for us it’s not one or the other. It is this unified experience.

Read more: Nestlé Blue Bottled Caffeine D2C Subscription Model

The ripples of Dutch Bros. ‘ The success of the IPO is visible around the world. In October, Bloomberg announced that Manner Coffee, a Shanghai-based Chinese coffee chain, was planning to go public via an IPO in Hong Kong, seeking to raise at least $ 300 million.

Cafes have been doing well in recent months. Starbucks announced Thursday (October 28) that its global comparable store sales increased 17% in the quarter ended October 3 and 22% in North America. Restaurant Brands International (RBI) announced last week (October 25) that comparable sales at Tim Horton rose 9% in the third quarter. Coca-Cola announced Wednesday (October 27) that its category of coffee had increased by 19%, “mainly driven” by the reopening of its Costa cafes in the United Kingdom.

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